Prices on the Costa del Sol are still drifting down, except for special properties in the best locations. There is still demand and indeed competition for those, which maintain their value. Parallel to this, the banks are under increasing pressure to revalue their stock to realistic levels and to get rid of their property mountain. My opinion is that, unfortunately, they can only do that in bulk by offering prices that are sufficiently adjusted downwards to interest investors/speculators who hope to sell-off the properties as individual units. There are just not enough individuals around wanting to occupy. The original property bubble was inflated by speculation and it’s going to have to be saved by that too. However, the speculators are going to need deep pockets and to wait before getting any return.
Having said that, I do have a client who has bought two whole urbanisations and is selling to Nordic clients, where the economies have not suffered as much and there isn’t so much personal debt. Prices are not cheap, but he is making sure that his buyers are getting quality and above-average services. However, this is a numerically limited market. Russians, Germans and some other Northern Europeans, including the occasional Brit, are the other buyers, along with some Spaniards who have somehow kept or gained sufficient finance for investment. On the larger scale developments there is Arab money being invested for the longer term, so the future of the Costa del Sol is secure and will continue to mature. Continue reading